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EURUSD breaks important technical supports

EURUSD Tech analysis by Simon Kazinsky on 15:59 Octuber 24, 2016 EST

EURUSD trades well below 1.10 once again after months trying to make its mind up. The pair appears to have ended a consolidation stage that has lasted since the beginning of 2015. The pair has been remarkably steady considering global developments during that time and has traded in a narrow range of 500 pips.

The euro managed at one point to reach 1.15 breaking important resistances on its way but the rise was unstained and, eventually, it started to give signs of weakness versus the dollar but also against other currencies which are not performing as well as the greenback. For instance, the single currency has recently broken below important supports against the Australian and Canadian dollars.

In all, the outlook for EURUSD has shifted from moderately bullish to bearish as the pair broke and remains below 1.10.

Only a break back above 1.10 will make me revisit this bias at this point but, on the meantime, there is no reason to buy the euro against the dollar. There are no reasonable places where to open trades and places stop loses and bullish targets below 1.10 do not justify the risk. On the contrary, opening bearish bets offer the possibility to set tight stop loses and aim for more ambitious limit orders.